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Global Fund Sees Changes, Not All of Them Welcomed

Major changes erupted at one of the world’s leading health-funding agencies Thursday as it hired a new director, dismissed the inspector general who had clashed with a previous director and announced a new approach to making grants.

Dr. Mark Dybul, the Bush administration’s global AIDS czar who was abruptly dismissed when President Obama took office, was named the new executive director of the Global Fund to Fight AIDS, Tuberculosis and Malaria.

Dr. Dybul, who was selected over candidates from Canada, Britain and France, was backed by the United States, which donates about a third of the fund’s budget, and by Bill Gates, who helped the fund through a cash crisis earlier this year.

He is respected by many AIDS activists in the United States, though there is some lingering controversy about his time in the Bush administration related to abstinence policies and anti-prostitution pledges imposed by conservative lawmakers as well as concerning strict licensing requirements for generic drugs.

The fund, which is based in Geneva and has given away more than $20 billion since its founding in 2002, has been in crisis for more than a year. Some donors shied away after widely publicized corruption scandals, while others, notably Mr. Gates, said the scandals were exaggerated and increased donations.

Its last executive director, Dr. Michel Kazatchkine, quit in January after the day-to-day management duties of his job were given to a Brazilian banker, Gabriel Jaramillo, who was charged with cutting expenses.

By some accounts, 40 percent of the employees soon left, although Seth Faison, a fund spokesman, said the total number of employees declined by only 8 percent. The fund also dismissed its inspector general, John Parsons, on Thursday, citing unsatisfactory work.

Mr. Parsons and Dr. Kazatchkine had privately clashed. Mr. Parsons’s teams aggressively pursued theft and fraud, and found it in Mali, Mauritania and elsewhere. But the total amount stolen — $10 million to $20 million — was relatively small, and aides to Dr. Kazatchkine said the fund cut off those countries and sought to retrieve the money. The aides claimed that Mr. Parsons, who reported only to the board, went to news outlets and left the impression that the fund was covering up rampant theft.

The fuss scared off some donor countries that were already looking for excuses to cut back on foreign aid because of the global economic crisis.

Mr. Parsons did not return messages left for him Thursday.

Dr. Dybul’s appointment was welcomed by the United Nations AIDS program, the Bill and Melinda Gates Foundation, the Elizabeth Glaser Pediatric AIDS Foundation, Malaria No More and Results.org, an anti-poverty lobbying group. By contrast, Jamie Love, an American advocate for cheaper AIDS drugs who works in Washington and Geneva, said he expected Dr. Dybul “to protect drug companies.”

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The fund also announced a new application process, which it said would be faster and focus more on the hardest-hit countries rather than all 150 that received some help in the past.

In an interview, Dr. Dybul said he felt the fund was “on a strong forward trajectory” after changes were put in place in the last year by Mr. Jaramillo, and now would focus on “hard-nosed implementation of value for money.”

Both the President’s Emergency Plan for AIDS Relief and the fund spend billions, but in different ways.

The fund supports projects proposed by national health ministers and then hires local auditors to make sure the money is not wasted or stolen. Pepfar usually gives grants to American nonprofit groups or medical schools and lets them form partnerships with hospitals or charities in the affected countries.

The conventional wisdom is that the Global Fund’s model is more likely to win the cooperation of government officials but more vulnerable to corruption — and also spends less on salaries and travel for American overseers.

Dr. Kazatchkine said he did not expect Dr. Dybul to “Pepfarize” the Global Fund.

“I hope that, after a year of turbulence, the fund finds the serenity needed to move forward again,” he said.

A version of this article appears in print on November 16, 2012, on Page A9 of the New York edition with the headline: Health Fund Sees Changes, Not All of Them Welcomed. Order Reprints|Today's Paper|Subscribe